MONEY AND POLITICS

Most people would agree that there is too much money in politics. The days when a British Prime Minister, Harold Wilson, could say that the cost of winning a general election was not much more than a couple of phone calls, have long gone. It is estimated that total spending on the most recent U.S. electoral cycle (from the Presidential election in 2008 to the Presidential election in 2012) topped US$6 billion, enough to buy you zillions of phone calls and much else besides.

Many people would also move on from that and say that you can't win in politics unless you spend a lot of money. In other words, we are moving from a correlation - lots of money goes hand in hand with politics - to a causation - lots of money drives politics. This has now become received wisdom; like much such wisdom, it is wrong.

Start with anecdotal evidence. At the beginning of 2010, the U.S. Supreme Court issued a landmark judgment in Citizens United v. Federal Election Commission. In a 5-4 decision, it held that the constitution's First Amendment on free speech precluded any restrictions on political campaign spending by companies, unions and independent groups. This decision was widely viewed as being helpful to the Republican Party, which tends to have richer sympathisers than the Democrats; and indeed, Mitt Romney received far more money from these sorts of organisations than did Barack Obama. Yet running as an experienced businessman against an incumbent who had disappointed and with an (at best) poor economic record, Mr. Romney still lost the recent race for President.

Anecdotal evidence is not of course proof. Can one find proof? As it happens, you can, it's one of the topics discussed in Freakonomics. The U.S. House of Representatives is unusual as a political legislature, in that its 435 members are elected for the relatively short period of two years, and nearly all of the races are between just two people, namely a Republican and a Democrat. Because of that combination, representatives spend a lot of their time in almost permanent campaigning, and many of the formal election campaigns are between the same two people. When Steven Levitt looked at the data, he found almost 1,000 examples of consecutive congressional elections since 1972 in which the same two candidates had run against each other. In other words, the only thing that changed was the amount of money each candidate spent.

His analysis of the data showed that "the amount of money spent by the candidates hardly matters at all". A winning candidate first time round could cut his spending in half and lose only 1% of the vote. A losing candidate who then doubled his campaign spending would pick up about the same. What mattered to voters was not how much money you spent, but who you were. Some politicians are attractive to voters, some are not. I suspect that at bottom, the Obama-Romney election was like that.

All of which is vaguely reassuring, since I have yet to be offered a vast sum of money to run for office by some fabulously wealthy tycoon. Which means in turn that my future political career might still just happen ....

Walter Blotscher